Working Paper: NBER ID: w15348
Authors: John C. Haltiwanger; Ron S. Jarmin; C. J. Krizan
Abstract: In part due to the popular perception that Big-Boxes displace smaller, often family owned (a.k.a. Mom-and-Pop) retail establishments, several empirical studies have examined the evidence on how Big-Boxes' impact local retail employment but no clear consensus has emerged. To help shed light on this debate, we exploit establishment-level data with detailed location information from a single metropolitan area to quantify the impact of Big-Box store entry and growth on nearby single unit and local chain stores. We incorporate a rich set of controls for local retail market conditions as well as whether or not the Big-Boxes are in the same sector as the smaller stores. We find a substantial negative impact of Big-Box entry and growth on the employment growth at both single unit and especially smaller chain stores - but only when the Big-Box activity is both in the immediate area and in the same detailed industry.
Keywords: bigbox; retail; employment; momandpop; local economy
JEL Codes: L26; L81; R11; R3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| entry and growth of bigbox stores (L81) | negative impact on employment growth at single unit and smaller chain stores (F66) |
| entry of same sector bigbox within 1 mile (R32) | decline in net employment growth for single units (J23) |
| entry of same sector bigbox within 1 mile (R32) | increase in job destruction from exit (J63) |
| increased bigbox activity (E44) | greater job destruction (F69) |
| entry of other sector bigbox (L89) | positive effects on net employment growth from other sector bigbox activity (J23) |